Title

Understanding risk-taking behavior of groups: A “decision analysis” perspective

Abstract

Past research has extensively investigated the effect of media, especially focusing on how anonymity increases risk-related behaviors of groups when using computer-mediated communication (CMC). This study extends prior research by examining the differences in group risk-taking behaviors between face-to-face groups and completely non-anonymous CMC groups (i.e., groups working in a fully identified, synchronous CMC environment similar to popular instant messaging systems utilized widely within organizations). Drawing on the “decision analysis” perspective, a key framework for understanding organizational decision-making, the study also examines the effects of the firm's risk preferences as well as the type of information distribution among group members (i.e., full information known to all group members versus partial information know by only some of the members) on the groups' risk-taking behaviors. Results from a laboratory experiment using student subjects found no differences in risk-taking behaviors between CMC and face-to-face groups; additionally, no differences were found related to how information was distributed among group members. A significant effect was found, however, for the risk preference of the firm, showing that risk-neutral firms influenced groups to make riskier decisions than groups from risk-averse firms. Finally, groups within risk-neutral firms receiving partial information made riskier decisions than groups receiving full information. The implications of these results for future research and practice are examined.

Department(s)

School of Accountancy

Document Type

Article

DOI

https://doi.org/10.1016/j.dss.2008.12.003

Keywords

group risk-taking behavior, computer-mediated groups, decision analysis, firm risk preferenceHidden profile tasks, types of anonymity

Publication Date

2009

Journal Title

Decision Support Systems

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